Techstars, a long-established startup accelerator with nearly two decades of experience, has unveiled updated investment terms for participants in its three-month program. Beginning with its fall 2025 cohort, the organization will now provide $220,000 in total funding to each startup—a significant increase of $100,000 compared to previous offerings.
The funding structure consists of two distinct components. First, Techstars will invest $20,000 in exchange for a 5% equity stake in participating companies. Second, startups will receive an additional $200,000 through an uncapped SAFE (Simple Agreement for Future Equity) note. This SAFE includes a “most favored nation” clause, ensuring that Techstars’ investment terms remain aligned with the most favorable terms offered by future investors. For example, if a startup later secures funding at a $10 million valuation, Techstars’ $200,000 SAFE would translate to a 2% equity stake, resulting in a combined total ownership of 7% from both components of the investment.
This revised approach brings Techstars’ model closer to that of Y Combinator (YC), another prominent accelerator. YC adjusted its terms three years prior, offering startups $500,000 through a combination of $125,000 for 7% equity and a $375,000 SAFE note. While YC provides more than double the upfront capital compared to Techstars’ new terms, it also requires a larger equity stake. The choice between programs may depend on a startup’s specific financial requirements and growth strategy, balancing immediate funding needs against long-term ownership considerations.
Both accelerators continue to shape the early-stage investment landscape, with Techstars’ updated terms reflecting evolving market standards and competitive dynamics in the startup ecosystem.
